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Latin America and the Caribbean: trade relations in the face of global geopolitical fragmentation risks

Author

Listed:
  • Rodolfo Campos

    (Banco de España)

  • Jacopo Timini

    (Banco de España)

Abstract

Rationale A geopolitical fragmentation of world trade, i.e. the emergence of two blocs that restrict trade with countries in the other bloc, has recently become a more likely prospect. How does this geopolitical risk affect the trade and economic outlook for Latin America and the Caribbean? Takeaways •Countries in Latin America and the Caribbean differ in terms of both their trade openness and the geographical structure of their trade. •They are therefore heterogeneously exposed to the risk of geopolitically fragmented trade. •We quantify each country’s exposure and analyse how Latin America can harness greater trade integration with the European Union to reduce the costs of a potential fragmentation of world trade.

Suggested Citation

  • Rodolfo Campos & Jacopo Timini, 2023. "Latin America and the Caribbean: trade relations in the face of global geopolitical fragmentation risks," Economic Bulletin, Banco de España, issue 2023/Q1.
  • Handle: RePEc:bde:journl:y:2023:i:01:n:13
    DOI: https://doi.org/10.53479/29631
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    References listed on IDEAS

    as
    1. Ioannou, Demosthenes & Pérez, Javier J. & Almeida, Ana M. & Balteanu, Irina & Kataryniuk, Ivan & Geeroms, Hans & Vansteenkiste, Isabel & Weber, Pierre-François & Attinasi, Maria Grazia & Buysse, Krist, 2023. "The EU’s Open Strategic Autonomy from a central banking perspective - Challenges to the monetary policy landscape from a changing geopolitical environment," Occasional Paper Series 311, European Central Bank.
    2. Treb Allen & Costas Arkolakis & Yuta Takahashi, 2020. "Universal Gravity," Journal of Political Economy, University of Chicago Press, vol. 128(2), pages 393-433.
    3. Jacopo Timini & Francesca Viani, 2020. "The EU-MERCOSUR free trade agreement: main features and economic impact," Economic Bulletin, Banco de España, issue 1/2020.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Latin America and the Caribbean; geopolitics; international trade.;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration

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